Scott Gilmour
OPINION
Please allow me to introduce myself. I’m a proud Kiwi and an unabashed capitalist. I’ve been extremely fortunate to have worked in the IT industry since gaining a B Com from Otago Uni in the late 70s and had the privilege of living and working in the United States for 15 years in the 1980s and 1990s.
Yet I’m also saddened by the direction and distance our country has travelled in the past 40-plus years.
This became especially evident to me when I returned to New Zealand in 1997 from the United States, only to realise that my rose-tinted view of our country was no longer accurate. We were travelling down the same road as the US – just 20 years behind – with increasing polarisation in society between the haves and the have-nots.
My life changed in 2002, when we sold a start-up I’d been involved with in Oregon, which meant I could pursue an interest in the I Have a Dream programme that I’d read about in 1991 in the local paper.
For the past 20 years, I’ve had the opportunity to work with some truly amazing people in some of our more challenged communities. I’ve been honoured to see the pride and joy in children and families who have little in the way of material comforts, but who have boundless amounts of joy, laughter, community spirit and optimism.
We need to start with a definition of what it means to be in poverty.
A 2022 report from Statistics NZ states the proportion of children living in households in material hardship (lacking six or more of 17 essential items) was 10.3 per cent.
Why is this important? Dr Russell Wills, the former Children’s Commissioner, wrote in the NZ Herald recently: “Child poverty matters because it drives poor health, education, and social outcomes, and because it’s just wrong. This is not who we are. NZ was once an egalitarian country where one’s life opportunities were not determined by the parents you were born to.”
Along my 20-year journey, I’ve collected some deep impressions of the challenges and opportunities that NZ faces … what I term “Facts for Thoughtful People”.
Please allow me to share these with you:
First, no one chooses to be poor. Every family that we’ve worked with wants the best for their children. The problem is they face huge difficulties in providing that when they’re in low-wage jobs, living in damp and cold housing, are in “food deserts” (i.e., no healthy eating choices within walking distance), have limited access to healthcare and are often served by struggling schools.
Second, poverty reduces the ability to navigate other areas in life. An article from Princeton University explains how poverty and all its associated stress requires so much mental energy that those who are impacted by financial hardship suffer reduced mental bandwidth to cope with many basic areas of their life. As a result, they are more likely to make mistakes or decisions that can further perpetuate their financial woes. This is all blindingly obvious, once you think about it, but it is something which is usually overlooked by talkback radio hosts, social media commentators, many politicians, and the designers and administrators of government service delivery.
This quote from one of the paper’s authors sums it up: “Previous views of poverty have blamed poverty on personal failings, or an environment that is not conducive to success. We’re arguing that the lack of financial resources itself can lead to impaired cognitive function. The very condition of not having enough can actually be a cause of poverty.”
Third, the Government’s attempts to help sometimes do the opposite. The problems arise when mistakes (eg, benefit overpayments) are clawed back, and failures in other parts of the system (eg, excessive housing costs that mean people are forced to borrow from Winz to cover the basics) result in increased – and unaffordable – debt.
A recent article in The Post said that, according to government figures, about 560,000 low-income earners owe about $3.5 billion of combined debt to MSD, the Ministry of Justice (MOJ), and Inland Revenue (IR).
This is almost 10 per cent of our population, over-represented by beneficiaries, families with young children and Māori/Pasifika. The Labour Government Cabinet signed off a paper titled “A Framework for Debt to Government” in July 2023 that acknowledged owing money to the government can be the cause of “unaffordable and persistent burden” which can contribute to “financial hardship, stress, poor physical and mental health, stigma and social exclusion”.
Fourth, poverty imposes a huge cost on our society. Richie Poulton, the director of the Dunedin Study who recently died, stated “What was most important about that original finding, was that you can’t really undo what happens during childhood. The experience of intense or regular poverty is long-lasting.”
In December 2016, the Dunedin Study put out a media release headlined: “Childhood disadvantage strongly predicts costly adult life-course outcomes. Simply stated, the poorest 22 per cent of the cohort accounted for 54 per cent of cigarettes smoked; 57 per cent of hospital nights; 66 per cent of welfare benefits; 77 per cent of fatherless child-rearing; 78 per cent of prescription fills; and 81 per cent of criminal convictions.”
Which is why Sir Bill English has pointed out that “Those people who need well-integrated, comprehensive, flexible, and trusted services – they do not get it from the government. That group is about 15 per cent of the population and they drive about half of all government spending in social and health sectors.”
Therein lies the carrot: If we can fix this problem of childhood poverty, we can not only dramatically improve life outcomes for these children and families, but we can also save massive amounts of social sector spending down the line.
Surely, any thinking capitalist can see the return on investment in that outcome!
Next week, I’d like to discuss how – with already proven programmes applied consistently for a generation – we can overcome poverty in New Zealand.
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